Mike Jung
06-15-2006, 11:23 AM
GM (Canada) restores zero-interest finance plan
Aim was to pare incentives, but sales down 10%
StatsCan report cites slowdown across industry
Jun. 15, 2006. 01:00 AM
TONY VAN ALPHEN
Toronto Star newspaper
BUSINESS REPORTER
Auto industry leader General Motors of Canada Ltd. is offering zero-interest financing on most models for the first time in two years in an effort to pull out of a sales slide.
GM announced the incentive yesterday on cars and light trucks, including Impala and Cobalt cars and Silverado and Sierra pickup trucks, for four-year or five-year terms.
The move comes after GM's top sales executive said the company would stick to its strategy of focusing on value and reducing reliance on less profitable daily rentals, despite declining business.
The latest incentive, which has no listed expiry date, does not apply to the Solstice, Malibu LS, Lucerne, Corvette, SSR and two-wheel-drive TrailBlazer and Envoy models.
The incentive can save consumers thousands of dollars depending on the size of their down payment and the retail price of the model.
Last summer, GM followed DaimlerChrysler Canada Inc. and Ford Motor Co. of Canada Ltd. in extending employee discounts to consumers. It meant savings ranging from $4,400 Cdn to more than $8,000 Cdn off auto prices.
The incentive jacked up sales temporarily but was costly for the three auto makers. One industry watcher described the program as "insanity."
Last fall, GM reduced prices on many models and embarked on a strategy of emphasizing value instead of incentives.
It offered gasoline savings of up $500 to consumers as fuel prices soared this spring, but stayed away from more expensive enticements. The gas offer ends June 30.
But GM's sales and leases of new vehicles have tumbled almost 10 per cent, or more than 18,700, in the first five months of this year.
Sales of new cars and trucks from all manufacturers, in fact, fell 0.7 per cent in April, erasing a 0.6 per cent gain recorded the month before, Statistics Canada said yesterday, adding that preliminary figures suggest a further drop in May. Overall, customers drove 136,724 new vehicles off dealer lots in April, a decrease of about 1,000 vehicles from March.
The report said new auto sales have been stable over the past six months after wide swings last year caused by incentive programs. Sales of both passenger cars and trucks dipped in April, although car sales showed a slightly larger decline.
Weak sales of North American vehicles pulled car sales down by 0.9 per cent overall, even though sales of foreign cars jumped 7.4 per cent.
Sales of minivans, sport-utility vehicles, light and heavy trucks, vans and buses fell 0.6 per cent, the first drop this year.
Sales fell in seven provinces in April. Only Newfoundland and Labrador recorded a sizeable gain in the month, with sales up 4.8 per cent. Sales were up slightly in Quebec and Alberta.
Analysts said before the latest report it would be difficult for GM to refrain from matching or leading the industry in incentives when rivals continue to cut into the company's market share with sweeteners. GM's share has dropped almost 3.5 percentage points to 26.3 per cent in Canada this year.
Other auto makers reduced incentives earlier this year but have gradually increased them again in recent months.
Ford, Hyundai, Mazda and DaimlerChrysler are also currently offering no-interest financing on various models.
I wonder if this will attract people to buy GM vehicles ?
Aim was to pare incentives, but sales down 10%
StatsCan report cites slowdown across industry
Jun. 15, 2006. 01:00 AM
TONY VAN ALPHEN
Toronto Star newspaper
BUSINESS REPORTER
Auto industry leader General Motors of Canada Ltd. is offering zero-interest financing on most models for the first time in two years in an effort to pull out of a sales slide.
GM announced the incentive yesterday on cars and light trucks, including Impala and Cobalt cars and Silverado and Sierra pickup trucks, for four-year or five-year terms.
The move comes after GM's top sales executive said the company would stick to its strategy of focusing on value and reducing reliance on less profitable daily rentals, despite declining business.
The latest incentive, which has no listed expiry date, does not apply to the Solstice, Malibu LS, Lucerne, Corvette, SSR and two-wheel-drive TrailBlazer and Envoy models.
The incentive can save consumers thousands of dollars depending on the size of their down payment and the retail price of the model.
Last summer, GM followed DaimlerChrysler Canada Inc. and Ford Motor Co. of Canada Ltd. in extending employee discounts to consumers. It meant savings ranging from $4,400 Cdn to more than $8,000 Cdn off auto prices.
The incentive jacked up sales temporarily but was costly for the three auto makers. One industry watcher described the program as "insanity."
Last fall, GM reduced prices on many models and embarked on a strategy of emphasizing value instead of incentives.
It offered gasoline savings of up $500 to consumers as fuel prices soared this spring, but stayed away from more expensive enticements. The gas offer ends June 30.
But GM's sales and leases of new vehicles have tumbled almost 10 per cent, or more than 18,700, in the first five months of this year.
Sales of new cars and trucks from all manufacturers, in fact, fell 0.7 per cent in April, erasing a 0.6 per cent gain recorded the month before, Statistics Canada said yesterday, adding that preliminary figures suggest a further drop in May. Overall, customers drove 136,724 new vehicles off dealer lots in April, a decrease of about 1,000 vehicles from March.
The report said new auto sales have been stable over the past six months after wide swings last year caused by incentive programs. Sales of both passenger cars and trucks dipped in April, although car sales showed a slightly larger decline.
Weak sales of North American vehicles pulled car sales down by 0.9 per cent overall, even though sales of foreign cars jumped 7.4 per cent.
Sales of minivans, sport-utility vehicles, light and heavy trucks, vans and buses fell 0.6 per cent, the first drop this year.
Sales fell in seven provinces in April. Only Newfoundland and Labrador recorded a sizeable gain in the month, with sales up 4.8 per cent. Sales were up slightly in Quebec and Alberta.
Analysts said before the latest report it would be difficult for GM to refrain from matching or leading the industry in incentives when rivals continue to cut into the company's market share with sweeteners. GM's share has dropped almost 3.5 percentage points to 26.3 per cent in Canada this year.
Other auto makers reduced incentives earlier this year but have gradually increased them again in recent months.
Ford, Hyundai, Mazda and DaimlerChrysler are also currently offering no-interest financing on various models.
I wonder if this will attract people to buy GM vehicles ?